Olson Rug Company v. NLRB

• Citation: 304 F.2d 710
• Decision Date: 29 June 1962
• Docket Number: No. 12303.,12303.
• Parties: OLSON RUG COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

304 F.2d 710 (1962)

OLSON RUG COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 12303.

United States Court of Appeals Seventh Circuit.

June 29, 1962.

Frederick W. Turner, Jr., Chicago, Ill., for petitioner.

Marcel Mallet-Prevost, Asst. Gen. Counsel, Paul J. Spielberg, Atty., National Labor Relations Bd., Washington, D. C., for respondent.

Before HASTINGS, Chief Judge, and DUFFY and KNOCH, Circuit Judges.

DUFFY, Circuit Judge.

This case is before us on the petition of the National Labor Relations Board (Board) that Olson Rug Company (Olson or Company) be adjudged in civil contempt of this Court's decree dated December 9, 1958. Questions involved in this prolonged dispute between Olson and the Board have been before us previously in 7 Cir., 260 F.2d 255 and 7 Cir., 291 F.2d 655.

Olson is engaged in the manufacture of rugs and carpeting in Chicago. It employs about 900 to 950 production and maintenance employees in its manufacturing establishment. Textile Workers Union of America, AFL-CIO (Union) won a Board-supervised election on May 24, 1957, by a margin of 53 votes. Over the vigorous objections of Olson, the Board certified the Union as the collective bargaining agent.

Olson refused to bargain with the Union claiming, as it did before, illegal pre-election conduct by the Union. On April 10, 1958, the Board held that Olson's refusal to bargain violated Section 8(a) (5) and (1) of the National Labor Relations Act, 29 U.S.C.A. § 158(a) (5) and (1). Olson was ordered to cease and desist from its unfair labor practices and was directed to bargain with the Union. Upon a petition by Olson for a review, this Court, on November 7, 1958, decided the Board's order should be enforced (260 F.2d 255). On December 9, 1958, this Court entered a decree which the Board now claims Olson has violated. Thereafter, the Board instituted proceedings to show cause why the officers, agents and representatives of Olson should not be held in civil contempt.

On December 5, 1960, this Court appointed a Special Master to determine the issues of fact presented by the Board's charge that Olson and its officers and agents should be adjudicated in civil contempt.

Olson and the Union did have a number of bargaining sessions from December 29, 1958 to November 13, 1959. Agreement was reached upon a number of issues. While the negotiations were in progress, the Union, on July 21, 1959, filed an unfair labor practice charge against Olson. In this charge the Union claimed Olson was engaged in sham bargaining; had granted unilateral wage increases during the period of negotiation; had refused to recognize the Union in processing grievances; and through a foreman, had made threats of surveillance of Union meetings. After an investigation of these charges, the Board, on October 23, 1959, notified the interested parties that the charge had been dismissed by the Board.

On November 13, 1959, Olson refused to continue bargaining with the Union and withdrew recognition. On the same day, Olson filed a representation petition with the Board. On November 30, 1959, a number of Olson's employees filed a decertification petition with the Board.

From November 1959 to January 7, 1960, the Board received new evidence relating to Olson's alleged unfair conduct. On January 7, 1960, the Board revoked its earlier dismissal of the charges on the ground of newly discovered evidence and because of Olson's withdrawal of recognition of the Union.

On July 27, 1960 and August 17, 1960, respectively, the Board dismissed the representation petition and the decertification petition consistent with its practice of dismissal of such petitions while unfair labor practice charges are pending.

The contempt petition filed by the Board charges Olson with the following conduct which it claims to be contemptuous of this Court's decree of December 9, 1958:

a) Olson instituted unilateral changes in its wage structure without consulting the Union;

b) Olson employed undercover operatives to observe and report on Union attitudes and the activities of its employees;

c) Olson employed undercover operatives to learn and report on the Union\'s bargaining strategy;

d) Olson withdrew recognition from the Union and refused to bargain further in the absence of good faith doubt of the Union\'s majority status.

The Special Master conducted hearings on twenty-five days between January 12 and September 15, 1961. He has made and filed with this Court fourteen findings of fact, ten conclusions of law and has made three recommendations.

A Special Master's findings of fact are not to be set aside unless clearly erroneous. Polish National Alliance, etc. v. N.L.R.B., 7 Cir., 159 F.2d 38, 39. In Polish National, this Court appointed a Special Master to make findings of fact on certain issues. We there said (159 F.2d 39): "Ordinarily a Master's findings are not to be set aside unless clearly erroneous. This is the provision of the Federal Rules of Civil Procedure, Rule 53(e) (2), 28 U.S.C.A. * * * pertaining to District Courts. We are of the opinion that a similar rule should be applicable to the instant situation. * *"

To the same effect, see N.L.R.B. v. Standard Trouser Co., 4 Cir., 162 F.2d 1012, 1014; N.L.R.B. v. International Hod Carriers', etc., 2 Cir., 228 F.2d 589, 591; N.L.R.B. v. Spartanburg Sportswear Company, 4 Cir., 278 F.2d 312, 313.

There is evidence in the record which the Master was entitled to believe which establish the facts which we hereinafter describe.

The Master found that Olson failed to bargain in good faith with the Union and thereby violated this Court's decree. The Master further found Olson disobeyed our decree by engaging undercover operatives 1) to report on Union activities and attitudes of its employees, and 2) to learn the Union's bargaining strategy and to report such strategy to the Company in advance of bargaining sessions. The Master also found Olson withdrew recognition from the Union in the absence of good faith doubt of the Union's majority status.

The Company argues that the Special Master did not make a specific finding of fact that the agents failed to bargain in good faith. However, he did make specific findings as stated above which, if substantiated by the record, would necessarily result in the conclusion that Olson failed to bargain in good faith.

In N.L.R.B. v. Warren Company, Inc., 350 U.S. 107, 76 S.Ct. 185, 100 L.Ed. 96, the Supreme Court considered the question of good faith bargaining under circumstances quite similar to this case. There, the Court said (page 112, 76 S. Ct. page 187) the question for determination was "* * * whether an employer who has been found guilty by the Board of unfair labor practices in refusing to bargain with a union designated as the exclusive representative of its employees and who has been directed to so bargain, is, after a decree enforcing the order and without remedying its unfair labor practices, legally justified in refusing to bargain with the union because it contends the union does not in fact have majority status in its plant, or must such employer bargain fairly for a reasonable length of time in accordance with the order to avoid an adjudication in civil contempt."

The Court further said: "We believe that an employer in such circumstances cannot lawfully refuse to bargain; that he must do so for a reasonable time; and that for a failure to so bargain it is the statutory duty of the Court of Appeals on petition of the Board to adjudge him in contempt of its enforcement decree."

On December 29, 1958, the Company and the Union met for the first of twenty-five negotiating sessions. At the second session, on January 9, 1959, the Union submitted a contract proposal which was complete except for a wage clause.

The Company's cost-of-living plan called for adjusting the allowance semiannually. In January 1959, the allowance was 11 cents per hour. A decline of the cost-of-living index of .6 would permit the Company to reduce the allowance from 11 cents to 10 cents. A drop in the index was expected. Mr. Sikorski, bargaining for the Company, indicated that the Company would make the cut. McGrew for the Union told a meeting of the employees to expect such a cut, explaining it was not a wage cut, but resulted from the contract. However, the following morning, the Company announced that the full 11 cent allowance would remain in effect in spite of a reduction in the cost-of-living index figures.

By the seventh meeting the opening positions of the Company and the Union were fully disclosed. The Union asked a general increase of 15 cents an hour, a pool of 3 cents an hour to correct inequitable piece rates; incorporation of 11 cents cost-of-living in the wage scale, and the adjustment of this allowance every three months instead of every six months. The Union proposed an additional paid holiday, improvements in the Company's vacation plans, and a Christmas bonus.

The Company offered to continue the wage scale and the vacation plan then in effect. It offered no economic benefits. It was the position of the Company that it had to keep in step with rug companies in the east, and that they had given no recent wage increases.

At the eighth meeting, the Union presented...